The 500 Club in Clovis was ordered closed by state officials Wednesday, but the manager anticipates it will reopen in two to three days. Photo by David Castellon
Written by David Castellon
California Bureau of Gambling Control investigators believed The 500 Club card room in Clovis didn’t have enough funds to cover its gambling chips in use, prompting its closure on Wednesday.
That’s according to a copy of the emergency closure order issued by the state Attorney General’s Office obtained by The Business Journal.
It goes on to say the closure order stems from onsite evaluations earlier this month of the popular card room’s finances.
“That evaluation disclosed that the Clovis 500 Club lacked sufficient funds to cover chips-in-use” — chips not yet cashed in — and it noted that the club also lacked records documenting their chips-in-use liability.
It goes on to say that bureau investigators determined that no less than $438,600 in chips were held by Rhino Gaming, Inc., described by state officials as a “third-party provider of proposition player services.”
This is a business that contracts with gambling establishments to provide players who fill seats at card tables to ensure enough people are present for games, as well as to sit at empty card tables so other players will gravitate toward them to start playing poker and other games.
“The bureau determined that the balance of the Clovis 500 Club’s chip liability account was $50, and the balance of the Clovis 500 Club’s general account was negative $10,617,” the closure order continues.
That first investigation occurred Aug. 9, and the order goes on to say the bureau conducted another onsite evaluation on Monday determining that the club still lacked sufficient funds to cover its chips in use, and in both instances management couldn’t provide documentation to prove it had other means to secure its chips-in-use liabilities.
Officials with the Attorney General’s Office declined to discuss the investigation and its claims.
The 500 Club’s general manager, Dusten Perry, disputed the bureau’s claims during a Thursday press conference. He said he was unsure of which accounts the bureau is quoting, and that the card room carries bonds to cover chip liability, and as far as he knows those bonds still are accepted by the bureau.
“The bureau is interpreting their own regulations incorrectly right now,” he said.
He added the card room has about 240 employees, and pulls in about $65,000 to $75,000 in daily revenue and added that the card room could be reopened within 48 to 72 hours.
This is not the first time the 18-table card room has had a run-in with the Attorney Generals Office.
Back in 2015 the agency threatened to revoke The 500 Club’s card room license amid claims that owner Louis Sarantos, Jr. had taken on investors who weren’t included in the card room’s licensing.
State officials opted to continue the license to Sept. 30 of this year, but the closure order — delivered about 2 p.m. Wednesday — gave no indication the previous licensing issue playing a role in Wednesday’s closure.
It does include demands by the state that The 500 Club’s management provide within 48 hours of the closure order’s issuance satisfactory proof of its chip liabilities, along with opening an account at a savings institution and depositing into it an amount equal to that liability.
The bureau also demanded within 72 hours a list and locations of all the club’s cash, bank accounts and other assets.
Other conditions include issuing no further payments or wage payments — without the bureau’s consent — to Sarantos, his family or his representatives.
As for reopening the card room, requirements set by the Attorney General’s Office include hiring a new manager independent from Sarantos and his affiliates who will provide the bureau weekly reports on sources and uses of funds, as well as profits and losses at the card room.